Tyson Foods struggles in third quarter

Tyson Foods, one of the big four US meat processors, has revealed a $350m (€318.2m) operating loss for the third quarter of their financial year on a reduced turnover of $13.1bn.

This compares very unfavourably with a $1.033bn (€939m) operating profit posted on a $13.5bn (€12.3bn) turnover in the corresponding quarter in 2022.

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While the operating profit in the beef side of the business slumped to $66m (€60m) in the third quarter compared with $533m (€485m) in the same period last year, it was the only sector along with prepared foods that was in profit.

The pork business recorded a $74m (€67.3m) loss in the third quarter having posted a modest $25m (€22.7m) profit in the same period last year.

However, it was the poultry division that grabbed the most attention, turning a $277m (€251.8m) operating profit in the third quarter last year into a $314m (€285.4) operating loss this year.

The company has responded to the losses in its chicken business by announcing the closure of four processing locations with a cost of $300m to $400m (€272.7m to €363.6m) but despite this and the third quarter losses the company project an overall adjusted operating margin between -1% and 1% for the year.

Tyson is forecasting the same adjusted operating margin for its beef business and refers to the USDA forecast of 3% less beef available and high cattle prices in the US as the cause of the weak performance of beef compared to last year.

The pork business is also expected to be loss-making, with adjusted margins in the region of -4% to -2%, but the prepared foods division of the business is expected to perform relatively well with an adjusted operating margin between 8% and 10%.